Mortgage delinquencies across the nation saw an increase in August, reaching 3.53%, up from 3.39% in July and 3.43% a year prior. However, analysts are observing a flattening of this upward trend, which suggests the rate of increase is slowing down. Serious delinquencies, defined as mortgages at least 90 days past due, also rose, affecting 574,000 homes in August. This pushed the serious delinquency rate to 1.08%, a slight increase from 1.06% in July and 1.05% in August of the previous year.
Despite these increases, the number of homes in active foreclosure actually decreased slightly by 2% from July, totaling 240,000. This figure is still 19% higher than the same period last year. New foreclosure starts also saw a modest 1% decrease month-over-month, though they remain 12% higher than a year ago. The states with the highest serious delinquency rates are Mississippi at 2.11% and Louisiana at 1.95%. Other states with elevated rates include Alabama, West Virginia and New York. On the other end of the spectrum, North Dakota, South Dakota and Washington boast the lowest serious delinquency rates. The overall picture indicates a market where delinquencies are still a concern, but the acceleration of these issues appears to be decelerating.
I think what stands out here is the nuanced nature of the data. While the numbers are still trending up, the slowing pace of increase and the slight dip in active foreclosures offer a bit of a silver lining, suggesting the market might be finding a new equilibrium. We have to remember this is nationwide, location matters and these trends are not necessarily indicative of our local market directly, but something to watch out for.
